The single market strategy is the European Commission’s plan to unlock the full potential of the single market. The single market is at the heart of the European project, enabling people, services, goods and capital to move more freely, offering opportunities for European businesses and greater choice and lower prices for consumers. It enables citizens to travel, live, work or study wherever they wish.
But sometimes, these benefits do not materialise because single market rules are not known or implemented or they are undermined by other barriers. And in a rapidly changing environment, the single market needs to adapt to new ideas and business models.
That is why the Commission has decided to give the single market an important boost by taking measures that will:
Challenge: The collaborative or 'sharing' economy can offer greater choice and lower prices to consumers, while providing opportunities for innovative start-ups and existing companies. However, the emergence of these new business models raises questions as to how existing regulations apply. National and local authorities are responding with a patchwork of different regulatory actions: some encouraging activity, others restricting it. This results in legal uncertainty for all.
Additionally, the dynamic and evolving nature of the collaborative economy requires monitoring and analysis of its trends, especially the impact on prices and quality of services.
Approach: in June 2016 the European Commission presented the Communication on the European agenda for the collaborative economy, that aims to support consumers, businesses and public authorities to engage confidently in this rapidly evolving landscape. With this Communication, the Commission provides guidance on applicable EU rules and policy recommendations to help everyone fully benefit from the new business models and promote the balanced development of the collaborative economy. The guidance clarifies key issues faced by market operators and public authorities with respect to market access requirements, applicable tax rules, the liability regime for platforms, consumer protection and employment relations.
The Commission will continue to monitor the regulatory environment, and economic and business developments. It will ensure that existing EU law is consistently applied across the single market and will continue to look for ways to encourage the balanced development of the collaborative economy alongside existing ways of doing business.
Challenge: Small and medium-sized enterprises (SMEs), start-ups and young entrepreneurs face many obstacles. Access to finance is a critical issue. SMEs often complain about the complexity of VAT regulation, aspects of company law and how to comply with various regulatory requirements in different markets.
Approach: Efforts are already underway to improve companies' access to private finance through the Investment Plan and the capital markets union. Against this backdrop, the Commission will also bring forward proposals to create a European venture capital fund-of-funds supported by the EU budget and open to others to attract private capital.
The Commission will also simplify VAT regulations, reduce the cost of company registration and put forward a proposal on insolvency to give entrepreneurs who fail a second chance. Information on regulatory requirements should be accessible through a simple digital gateway and the Commission will push for high quality, online public services to reduce the administrative burden and make Europe a more attractive destination for innovators.
The Commission will also work on clear and SME-friendly intellectual property rules, and take the final steps needed for the unitary patent to become an attractive and affordable way for European companies, including SMEs, to capitalise on their ideas.
Challenge: When it comes to the mobility of professionals, more than 5,000 professions across Europe require specific qualifications to access the profession or to use a professional title. While regulations on access to and exercise of these professions were designed to protect the public, many of them are now disproportionate and create unnecessary regulatory obstacles to the mobility of professionals.
Services account for two-thirds of the EU economy, but the cross-border provision of services is underdeveloped.
Business service providers such as architectural, engineering or accounting firms who wish to offer their services in another EU country often face restrictive legal form or shareholding requirements. Construction companies find it difficult to get liability insurance and show compliance with authorisation schemes. Removing unjustified barriers to the cross-border provision of services would create huge opportunities for new companies to enter the market, improve competitiveness and lower prices for consumers.
Approach: Since 2014, the Commission has coordinated a process of mutual evaluation of regulated professions requiring EU countries to assess and possibly reform existing frameworks. As a next step, the Commission will propose specific actions for each country to improve the current rules. The Commission will also set out detailed rules for countries to use when reviewing existing professional regulations or proposing new ones. Countries will need to demonstrate that public interest objectives cannot be achieved through means other than limiting access to, or conduct in, the professional activities in question.
In January 2016, the Commission introduced a new, EU-wide digital procedure for the recognition of professional qualifications – the European Professional Card (EPC). The procedure, currently available for general care nurses, physiotherapists, pharmacists, real estate agents and mountain guides, makes it easier for Europeans to work where their professional skills are needed. The EPC contributes to the objective of making the single market a reality in practice.
For business service providers, the Commission will introduce a Services Passport that will significantly streamline the administrative procedure that EU service providers have to follow to expand their activities to other EU countries.
It will propose legislative action to address regulatory barriers such as diverging legal form and shareholding requirements, as well as multidisciplinary restrictions for key business services and, if appropriate, organisational requirements in construction companies. The Commission will review market developments and, if necessary, take action in connection with insurance requirements for business and construction service providers.
Challenge: The productivity growth of the retail sector has remained flat. A review of retail establishment rules identified a series of barriers including restrictions on the size or location of retail stores, the requirement to apply for a large number of permits, or the length of the procedure. In some cases these were not appropriate or proportionate to the objectives pursued.
Approach: The Commission will suggest best practices based on well-functioning solutions in different EU countries that allow national authorities to spot inefficiencies and modernise their retail legal frameworks. This will contribute to reducing barriers and making it easier for retailers to open outlets across the EU. It should also support authorities in EU countries in identifying the most efficient solutions to reach public policy objectives such as the protection of the environment and town and country planning.
Challenge: European customers often complain about unjustified differences in treatment on the grounds of nationality or residence, despite the fact that it is not allowed under EU law. Examples include a telecom company refusing to sell internet connectivity to nationals of a different country or utilities companies charging more for water to non-residents.
Approach: The Commission will take legislative and enforcement actions to ensure that consumers seeking to buy services or products in another EU country do not face differing prices, sales conditions or delivery options, unless this is justified by verifiable reasons. This applies to purchases both online and in person. The approach is in line with the geo-blocking initiative in the digital single market strategy and is part of the approach to further increase fairness in the single market.
Challenge: Standards are voluntary technical specifications that apply to various products, materials, services and processes. They contribute to safety, innovation and interoperability, and are essential to building the single market. However, the standardisation process faces challenges from changes such as globalisation, extended supply chains, the ever expanding role of information and communication technology (ICT), the growing importance of services, and the bundling of goods and services in single packages.
Approach: The Commission will, through a Joint Initiative, modernise its existing standard-setting partnership, in cooperation with industry, the European Standardisation Organisations, SMEs and all other interested parties. Building on the successful experience on product standards, the specific objectives of the Joint Initiative on Standardisation will be for Europe to continue developing as an international hub for standardisation, to allow the realisation of the potential of service standardisation, and to align the outputs of the European standardisation system with broad EU policy priorities.
Challenge: Public procurement is critical to the EU economy. Public expenditure on goods, works and services represents nearly one-fifth of EU GDP – more than €2.3 trillion are spent per year in the EU. EU rules aim to ensure the efficient use of taxpayer money, reduce corruption and modernise public administration. Transparent and competitive public procurement across the single market creates business opportunities and contributes to more efficient public administration, economic growth and job creation. EU law sets out minimum harmonised public procurement rules which have to be transposed into national law by April 2016 (by October 2018 in the case of e-procurement).
Approach: To speed up investment and avoid protracted litigation, the Commission will assist EU countries with a voluntary, ex-ante assessment mechanism of the procurement aspects of certain large-scale infrastructure projects. The Commission will promote networking between first instance review bodies and provide legal and technical assistance for EU countries to establish fast and fair remedy bodies. The Commission and EU countries will establish contract registers covering the life cycle of contracts. This will improve the transparency and the quality of national procurement systems, and support the development of a data analytics and anomaly-detection tool.
Challenge: The protection of intellectual property is important for promoting innovation and creativity, which in turn generates jobs and improves competitiveness. The EU needs an attractive, affordable and efficient intellectual property rights (IPR) system to compete on the global scale. This is particularly important for SMEs who do not have the same level of resources to manage their IP portfolio as bigger companies. Despite the recent progress made with the adoption of the unitary patent system and trade mark reform, IP protection in the EU remains fragmented.
Approach: The Commission will push through the final steps to make the unitary patent a reality and clarify how it will interact with national patents and national supplementary protection certificates. As already announced in the digital single market strategy, the Commission will review the enforcement of EU intellectual property rules in line with the ‘follow the money’ approach, the aim of which is to deprive commercial-scale infringers of their revenue flows, rather than pursuing individuals for infringing IPRs.
Challenge: Despite the overall success of the single market, significant obstacles remain for citizens and businesses to make the most of it. Citizens interested in moving to another country and businesses wanting to sell products or provide services cross-border still encounter problems.
At the moment, people and companies wanting to live, work or do business in another EU country find it difficult to find online the information they need in order to meet local requirements. Even when existing national and EU services offer information and assistance, it is fragmented, incomplete and of varying quality. Procedures that are online in some EU countries are not accessible to users from another EU country. As a result, users cannot exercise their rights in the same way as locals.
Another reason why many of the opportunities that the single market offers are not a reality is that EU law has not been fully implemented or enforced. In mid-2015, around 1,090 infringement proceedings were pending. Non-compliance weakens the single market's potential and lowers citizens' confidence in it. Enforcement of the single market includes national authorities ensuring that products are safe and comply with the rules. There are still too many unsafe and non-compliant products sold in the EU market, which puts compliant businesses at a disadvantage and endangers consumers. In several areas, the principle of mutual recognition which ensures that goods that are lawfully marketed in one EU country enjoy the right to free movement and can be sold in another EU country is not being applied. This prevents companies, especially SMEs, from selling their products elsewhere in the EU.
Approach: the Commission is taking important steps to encourage a culture of good government, compliance and enforcement by improving services and assistance for citizens and businesses interested in grasping the opportunities available in the biggest market in the world.
In May 2017, the Commission adopted a package of measures to make it easier for people and companies wanting to work, live or do business in another EU country, and to help ensure that commonly agreed EU rules are respected. The Commission adopted:
- a proposal for a regulation to establish a Single Digital Gateway. This initiative will make it easier for anyone interested in living, working or doing business in another EU country to find information about rules, procedures and assistance services, and also access national procedures through one user-friendly interface in a language they can understand. Feedback on the service will be used to constantly improve it. This will save citizens and businesses considerable time and money.
- a proposal for the Single Market Information Tool (SMIT). It will allow the Commission to obtain, in clearly framed cases, timely, comprehensive and reliable information from selected market players in specific instances, and as a last resort, where there are indications of serious difficulties with the application of EU single market legislation. The information will be handled subject to strict confidentiality requirements. Being subject to a SMIT information request does not imply any wrongdoing, and SMIT will not allow the Commission to pursue infringement cases against individual market players. It doesn't impose a recurring reporting obligation, but allows the sourcing of clearly defined and readily available data in targeted cases where this is strictly necessary. SMIT is not a new enforcement procedure, but rather a tool that can be used within the current infringement procedure under Article 258 TFEU and as a last resort.
- a SOLVIT Action Plan to further improve this free of charge service which provides rapid and pragmatic solutions to people and companies all over Europe when they experience difficulties with public administrations while moving or doing business cross-border in the EU.
The Commission will strengthen the market surveillance mechanism to detect unsafe and non-compliant products and to remove them from the EU market. It will also reinforce the application of the mutual recognition principles.
Upgrading the single market: more opportunities for people and business
On 28 October 2015, the European Commission presented a new single market strategy to deliver a deeper and fairer single market that will benefit both consumers and businesses.
- Communication, 'Upgrading the Single Market: more opportunities for people and business'
- Accompanying working document, 'A single market strategy for Europe – analysis and evidence'
- The Single Digital Gateway
- The Single Market Information Tool
- The possible revision of the Mutual Recognition Regulation (EC) No 764/2008 applying in the field of the free movement of goods
- Regulation of professions: Member states' national action plans and proportionality in regulation
- Start-up Initiative
- Proposal to introduce a Services Passport and address regulatory barriers in the construction and business services sectors
- Due diligence and supply chain integrity for intellectual property protection
- Proposal to reform notifications of new regulatory requirements for services providers
- The enforcement of intellectual property rights
- Role of platforms in the collaborative economy
- Geo-blocking and other geographically-based restrictions
- Factsheet (266 kB)
The strategy complements other key Commission initiatives